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Commentary: Can Caribbean Airlines lead Caribbean airline integration?
Published on May 9, 2013 Email To Friend    Print Version

By Peter E. Berkeley

It never fails. Just as soon as the airline begins to show signs of fractured operations, there is a flurry of Caribbean government “actions”, and a plethora of expert articles on what ails the airline and what should be done to make it better – almost no one seems to remember the principle of structured transformation: the time to make changes/improve the way you do business, is when things are going well; not when you have your back up against the wall –“if it ‘aint broke, don’t fix it”, alas, is very much alive and well.

peter_berkeley.jpg
Peter Berkeley is a national of Trinidad and Tobago, an international management consultant, and Affiliate Faculty at Indiana Wesleyan University’s School of Business and Leadership. You can reach him at peter@tiad.us
So now our attention is drawn one more time, not only to issues at Caribbean Airlines, but also to issues with Caribbean air transport, and the combined impact on Caribbean tourism and economy. But in this, is an inherent source of frustration. You see, it is history repeating itself. A dig into my archives revealed a chilling sense of déjà vu. Here are headlines from various news sources from across the Caribbean between 1997 and 2002:

11 September, 1997 Air Jamaica considers Caribbean airline pact
17 December, 1997 Gloomy predictions for Caribbean Aviation
23 January, 1998 No unity in CARICOM, says former St. Lucia PM
05 February, 1998 Rough air ahead for Caribbean Aviation
1 July, 1998 Regional airlines agree to "fast track" cooperation.
29 September, 1999 (Trinidad) Local airlines advised to cooperate and compete.
30 September, 1999 (Trinidad) Call for an alliance between airlines.
08 February, 2001 (Barbados) LIAT, BWIA talk unity.
09 February, 2001 (Antigua) LIAT wants regional aviation policy.
11 February, 2001 (Antigua) Regional states need air policy
15 February, 2001 (Comment) Tough times ahead for regional travel.
17 May, 2001 (Antigua) Regional airline "community" needed.
20 December, 2001 (Trinidad) BWIA, LIAT join forces.
02 November, 2002 (Trinidad) Manning calls for regional airline.
06 November, 2002 (Jamaica) 'Butch' says no to regional airline.
11 November, 2002 (Caribbean, Comment) Is CARICOM ‘flying a kite’ on single Caribbean airline?
13 November, 2002 (Trinidad) Khan: Regional air carrier must become a reality.
13 November, 2002 (Trinidad) Regional governments warn they will only support one regional carrier.
22 November, 2002 (Jamaica) Drums beat for integration - Caribbean airlines urged to unite.

Plus ça change, plus c'est la même chose

“The more things change, the more they stay the same”. Witness the theme through the most recent articles on Caribbean Airlines and the “one Caribbean airline”:

Will T&T lead the Caribbean? (April 23rd, 2013)
One Caribbean airline to take off? (May 1st, 2013)
Aviation ministers meet to discuss single Caribbean airline (May 1st, 2013)
Regional expert: inter-Caribbean carrier needed (May 4th, 2013)

In March of 2008, the Barbados Chamber of Commerce and Industry hosted a breakfast to examine the issue: Regional Air Travel -- A Deterrent to Business: How Can We Fix It? The comments from two people who participated in the session ring true today:

• “For the last 50 years, nothing has changed with Caribbean intra-regional travel except the names of airlines have changed and the amount of money lost keeps going up; but it is still the same” (Chastanet, St. Lucia Tourism).

• “Unless there is a major change in the Caribbean air services structure, both in terms of the air regulations and the technical side of it…and for governments to set the environment that will allow airlines to flourish, then we will continue to do the same thing over and over” (Sanguinetti, Caribbean Hotel Association).

• “Trying to establish our own civil aviation authorities is to me ludicrous. We are all using different programmes to try to do the same thing, and none of the programmes is talking to the other, so there is no efficiency. Left to me I would…have a common platform. Right now, we are causing a monopoly to take place because we are making it so prohibitive to do business down here and we are hindering ourselves” (Chastanet).

Sounds all too familiar. Caribbean leaders have, and continue to play politics with these issues, leaving one to ask the question: Is anybody really serious about Caribbean air transport; or is this, as someone suggested, merely political window dressing?

Yes, there has been progress since then, nonetheless. BWIA was replaced by Caribbean Airlines, which in turn acquired Air Jamaica; but that was a flawed relationship from the start. Caribbean Airlines did a very poor job of integrating Air Jamaica into its operations – not a good model for creating a “one Caribbean airline”. It is not that leadership did not have proper advice; rather, the decision makers seemed bent on a pre-determined path and would not waver from it. The result is that Jamaicans have another reason to dislike Trinidadians – we “stole” their national airline, and now we’re firing their pilots, shutting down their routes, and closing their customer service centers. The fact of the matter is, Caribbean Airlines leadership totally mishandled the integration, and now current CAL leadership is reaping what earlier leadership has sown – to the detriment of Trinidad and Tobago, and the larger issue of a one Caribbean airline.

On May 5th 2005, I wrote in a local Trinidad newspaper:

Even though the drums beat for integration across the Caribbean, the spotlight is on Trinidad & Tobago because it seems to be the primary driver of airline transformation efforts—it has the most to gain if the effort succeeds, and a lot to answer for if it fails.

What is needed now more than ever at Caribbean Airlines is strong, forward-thinking leadership – board and airline management -- that is capable of convincing the Caribbean community that it has the competency and capability to take the lead on this journey to the future. Unfortunately, beginning with its second Board of Directors, CAL has had nothing but dysfunctional, unfocused, and what can only be described as incompetent leadership; Board leadership that, for example, made irresponsible financial and route decisions that are directly responsible for the current financial quagmire in which the airline finds itself.

Unfortunately, we have been jaundiced by the competence of the board that shepherded the transition from BWIA to Caribbean Airlines. That board was headed by businessman Arthur Lok Jack, and comprised stalwart leaders in business and industry: Robert Riley (bp Trinidad), William Lucie-Smith (PricewaterhouseCoopers), Gervase Warner (Neal & Massey), and Shafeek Sultan-Khan (attorney at law). Under this board, the airline was run with no political influence, and left Caribbean Airlines with a positive financial ledger.

The general opinion is that fingers can be pointed at the current administration for making appointments based on political affiliation instead of on competence and business savvy. On June 24, 2012, David Abdulla, leader of the Movement for Social Justice (MSJ), spoke of a comment made by a senior Cabinet member regarding appointments that bothered him. “When a particular recommendation was being reviewed, the sentiment expressed by a line minister was that it was more important that chairmen and directors were being chosen on the basis of loyalty and not competence because a competent person may not be loyal but you can try to make a loyal person competent.”

That is a chilling indictment, but reality, about Trinidad and Tobago politics.

No wonder the current politically-appointed CAL board members seem clueless about clear directions for the airline’s future. No wonder the airline is drowning in red ink – these folks seem incapable of making any firm decisions that could move the airline forward. Thinking seems to be short-term and reactive to current events. The airline is like a rudderless ship being tossed about by political agendas, with the captain’s hands tied behind his back – but he’s still expected to get the ship to its destination with a demotivated staff and crew; a customer service function that was recently considered “customer disservice” by passengers; and an Air Jamaica that is still not fully integrated into Caribbean Airlines.

And that brings me to Robert Corbie. What does Corbie have to do with all of this? No one would dispute that strong leadership at Caribbean Airlines is indicative of the type of leadership capable of pulling off the long sought-after integration of Caribbean carriers. Corbie has served BWIA in multiple functions for over 20 years, and has been acting CEO for over two years. Corbie knows the airline – he has the history to prove it; he is also a forward thinker. But Corbie is a toothless tiger; and the board knows it. No one is pushing to confirm him as CEO so that he can make the kind of decisions needed to move the airline – and the concept of a regional airline – forward.

Could it be a deliberate, politically-motivated strategy to keep Corbie in limbo? With no power – the REAL power residing in the board and whatever political direction it want steer the airline - politics continues to trump business.. My fear is that, since Corbie was not appointed by the current administration, his position has now become tenuous. There is real concern that cronyism could extend beyond the board, reaching into the organization with political appointments at leadership levels, including a new politically-appointed CEO. If that happens, then God help the airline; my prediction is that it will regress and revert to a position worse than BWIA ever was.

A Call to Action – Trinidad and Tobago

I call upon the Prime Minister, the Minister of Finance and Corporate Sole, and the line minister with responsibility for the airline to consider the following actions to strengthen Caribbean Airlines’ hand:

1. CAL needs a strong business-focused Board of Directors that can clear the way of obstacles that prevent CAL from being successful, and that can run interference for the airline; a board that can give CAL the high level directions and guidance it needs to plot a competitive and profitable course to the future.

2. Appoint Robert Corbie, CEO – assuming he has not become totally demoralized by political interference. He has the experience, credibility, and capability to marshal not just Trinidadians, but Jamaicans as well, around what could be an exciting future for Caribbean Airlines and Caribbean Air Transport. Corbie also needs to strengthen his credibility with Caribbean leaders who will look to him to spearhead the “one Caribbean Airline” concept; that cannot happen if he continues to be a toothless tiger.

3. Corbie needs to create a robust business model for Caribbean Airlines -- devise a compelling vision of the future, develop strategies that align with that vision, and put in place effective implementation and monitoring systems to plot accomplishments against the strategic plan; he needs to set CAL’s house in order before tackling the issue of a regional airline. But at the risk of repeating myself, Corbie needs the backing of a strong business-oriented board of directors.

A Call to Action – Caribbean Political Leaders

I’m not about to lay out a strategic plan here, but here are some ideas for immediate action – if, that is, island leaders are serious about demonstrating political will to break the cycle of inertia and act NOW. A forewarning to critics. If you must criticize, then let’s use a process of creative destruction. You can rip these ideas apart – only if you suggest ways to improve them.

Step 1: Island leaders publicly and clearly affirm a Commitment to Act. Timeframe: IMMEDIATE

Step 2: Island leaders appoint an Integration Sponsorship Team. Timeframe: 3 – 6 months

• This high-powered team will comprise seven (7) high-level decision-makers; three representing regional governments, two representing the regional airline industry, and two representing the regional tourism industry.
• This team will be empowered by agreement from all island political leaders to:
  - Act on behalf of all island governments on issues of a “one Caribbean carrier”
  - Be the ultimate decision-makers for all integration efforts
  - Create an Integration Master Plan for approval by island governments
  - Guide and monitor implementation of the Master Plan
  - Report regularly to island governments on progress toward integration
  - Communicate on a regular basis with constituents in all islands on progress toward integration.

Let me repeat what Dr. the Hon Ralph Gonsalves, prime minister of St Vincent and the Grenadines and outgoing chairman of the Conference of Heads of Government, said at the Opening Ceremony of the 28th Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM) on July 2, 2007:

“It is in my view an act of irresponsibility, for any government to stand askance from regional solutions to the practical issues of intra-regional air travel. Moreover, it is entirely contrary to the letter and spirit of the regional integration movement…”

Are the failed airline ghosts of the past to rule us from their graves? Do we not have the confidence in our ability as the children of an authentic Caribbean civilisation, to fashion a regional airline solution in our people’s interests?”

It is urgent that Caribbean political leaders stop making “a regional airline” a political football. It’s time for Caribbean politicians to either put up by creating the right environment for transformation once and for all, or shut up. But let me be very definitive. We cannot re-engineer airline business processes without first re-engineering leadership. To a large extent, this means finding and installing competent leaders who are not encumbered by cronyism or past behaviours and practices.

So, what say you, island leaders? The ball’s in your court.
 
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Comments:

bimjim:

On my daily Caribbean aviation "blog" (craneforum.org), I am repeatedly told I am a Trini-hater for my statements, but the truth is I call the facts as I see them.

Those facts include the clearly evident fact that Trinidadians and BWIA/Caribbean Airlines are unable to "get their act together" - not just now, but historically. However fleeting the profit at the transformation, BWIA/CAL has lost money steadily since the airline was stolen from under the hands of the other regional governments during negotiations in London upon its purchase away from BOAC (ie: the British Government).

In the immediate past, Trinidad has quoted financial numbers showing that CAL has lost $45 and $84 million US dollars in the last two years (despite a fuel subsidy system-wide), yet the Vice-Chairman stated a few days ago that CAL is NOT having troubles and in fact jetted 19 of his friends off to a Festival in the US at a cost - to the airline - of some $20,000.

In recent times, Trinidad performed a government-to-government miracle and stole Air Jamaica away from Spirit Airlines which was the leading contender in a formal privatisation process. The agreement between the two Prime Ministers of the day remained secret for many months - and may yet still be a secret.

In that deal, Caribbean Airlines cherry-picked the profitable routes and dropped all of the others - it SHOULD be a profitable operation, yet CAL is losing money hand over fist.

Having doubled their losses in the last two years system-wide, CAL is now shedding Jamaican routes and personnel, to the point where a diplomatic row is brewing. According to all public reports, the Trinidadian side of the operation has not been touched.

Caribbean Airlines, whatever its pretension, is the National Airline Of Trinidad and Tobago. It always has been, and it always will be, and as such will ALWAYS be unsuitable as a truly representative regional airline.

Whether they like to hear it or not, for Caribbean Airlines, Trinidadians come first, Tobagonians come second, and everybody else comes a _distant_ last. That has always been the case in my experience, and I do not expect that to ever change.

A final point on Trinidad and Caribbean Airlines... they say "oil can't spoil". But seek information (on the internet - it's public) on Trinidad's oil and gas reserves and you will discover that it will all spoil in 17 years or so AT THE MOST. Factor in that T&T are building a pipeline up the islands to sell their minerals to the rest of us and you may deduce that the stated 17 years is going to shrink rather rapidly.

Were I at that table at the coming HoGs meeting, I would instead propose LIAT as the regional carrier, and seek support from the other countries of CARICOM and the OECS for expanding it from what it is now to an international carrier.

LIAT probably has all the necessary route rights grandfathered in from Courtline days, and it is the ONLY carrier which hires and employes nationals from all of the islands - including far-away Jamaica.

But a birdie tells me there are challengers in the wings, working on creating just such a regional airline with private money. Maybe LIAT can piggy-back on one of those and derive more profitable revenue from that source.

Vinci Vin:

Dear Messers Berkeley & BimJim:

The information presented in your article and comment are quite eye-opening. As a Vincentian living abroad with experience flying with both LIAT and CAL I find your arguments/suggestions quite relevant and timely for planning and implementing strategies to secure and maintain a viable Caribbean air transport system. This debate is too important for the region to be confined to the leaders of T&T and Jamaica. Anyone seeking to propagate inter-island rivaly should remember the 1960s when we threw out the Federation of the West Indies for which we continue to pay dearly both socially and economically.

As politicians seek short-term answers to long-term problems, initiatives to establish policies that will bring forth sustainable solutions to the regional air transport problems are stymied by political and parochial interests. To combat this situation, we need to broaden the debate so that the regional stakeholders (ordinary citizens) can have a voice in the decision-making process. I am happy to see that Dr. Gonsalves understands the gravity of this matter.

Best regards,

Vinci Vin


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